Two Questions for Libertarians

These occurred to me after the Association for Private Enterprise Education conference over the past few days.

1. How should libertarians frame government?

(a) as a criminal enterprise; or
(b) as a service provider that does a bad job, largely because it is a monopoly, with too many restrictions on entry and exit

Patri Friedman and I argued for (b). It sounds more positive and optimistic. One problem with (a) is that if you fear a criminal enterprise, what you tend to want is a stronger criminal enterprise that will give you better treatment.

I think this is a really fundamental issue for libertarians, and I do not have it fully settled in my own mind. On the one hand, I would like the model to be that we as consumers can choose government in a competitive market.

On the other hand, back in the real world, I buy into the analysis of North, Weingast, and Wallis in Violence and Social Orders. That is, the "natural state" consists of limited-access orders, in which violent elites divide up wealth and power. According to NWW, the process of getting from these limited-access order to open-access orders is not easy. Elites first develop formal institutions to solidify their own rights and privileges, and then they gradually extend these institutional protections to larger groups within the population.

Suppose that we start from an open-access order (a modern Western democracy with a mixture of markets and government). If people were to discard their romantic attachment to the state, would that lead to a competitive market in government, or would it lead to a reversion to the natural state?

This is not a new issue. See Hobbes.

2. When it comes to higher education, should libertarians work with or against the system?

The conference tends to draw people who are not from the Beltway libertarian crowd. They would rather argue deep philosophy than current policy. Some attendees might view a more policy-oriented think tank as conferring too much legitimacy on the existing system.

Meanwhile, there is a strong academic flavor to the conference, with an emphasis on pretty standard academic status markers and activities. Young people are encouraged to get advanced degrees, rather than, say, encouraged to start a business. Publication is valued. The academic hierarchy is respected. There is an implicit goal of raising the status of libertarians within the academic community. I find myself wondering whether this confers too much legitimacy on the existing academic system.

I think libertarians should go with (B). The problem with (A) is that only some types of libertarians tend to view government in that manner, particularly of the Rothbard variety. Everyone else doesn't.

Not sure I follow your answer to question 2, the text after the question did not seem to tie directly to the question.

Re starting a business rather than academics, while I reflexively like that, it is worth recognizing that starting and running a business is really, really hard work which leaves many proprietors with little time to advocate change effectively. Instead you get Joe the Plumber, upon the likes of whom the elite looks down. Paradoxically, some libertarians may need to sacrifice themselves for the good of liberty and go work within the system to change it for all. Exactly how libertarian principles might bring that sacrifice about is a little unclear.

It's a little hard not to resist the temptation, especially when one looks at some revisionist history and also looking at the U.S.'s criminal justice system. As to Arnold's question, why can't it be both A) and B)?

I find (a) hard to take as a pure description, but perhaps that is less because of the underlying philosophy, and more because it just makes me think of some kooks who advocate it.

(B) could be used to suggest that there are just some rules to fix. Yet one of the things that fuels the incompetence is that so many people at the top of government really do behave like (and often are) a criminal enterprise.

I would incline towards thinking of government as something like the butcher shop in The Sopranos, or the photocopying business run by Stringer Bell in The Wire: a semi-legitimate business that politicians keep incompetent because it serves their personal objectives.

I think it's important to remember that government should perform some vital roles that we wouldn't otherwise be able to deal with privately and still have a shared civil society. The legal system, property rights enforcement, shared infrastructure without the free rider problem, and elimination of some market failures (negative externalities, monopolies, etc.)

I like B, because it seems to recognize that the government is at least capable of providing these services to us. But because of all of the issues of politics, social choice, regulatory capture, etc. it doesn't do a very good job at the things we'd want from it. Sometimes, it might be causing more harm than good. For example, I think a lot of regulation does more to enforce existing monopolies than antitrust laws manage to prevent them.

It also highlights that other elements, like strong enforcement of contracts via the legal system, actually work pretty well and are a large part of our strength.

Governments engage in a mix of legitimate and illegitimate activities. One of the illegitimate activities is restricting entry, exit and competition. Is the fire department putting out a fire at your house akin to a chop shop? It is a complicated situation, about which most people don't bother thinking clearly, because they have no decisions to make which rest upon clear thinking on this issue. As Caplan points out, the costs of irrational political beliefs are low, so our thoughts on government are colored by e.g. status quo bias, stockholm syndrome and tribalism.

The "framing" that you refer to in your question implicitly acknowledges the low grade of thinking which most people apply to this issue. If the issue was important to people, it wouldn't matter how we framed it, they would work through to the best conclusion regardless. Patri's working on creating a situation where people can actually make a relevant decision. North, Weingast and Wallace are working on describing government using the best thinking available. It seems to me that better thinking and better options trump better framing, no?

That said, option b describes government as it is, rather than in terms of what it should be, and for that reason seems superior to me.

Criminal enterprises are only criminal if, um, there's a government with laws that define what crime is.

Government may be an "illegitimate" enterprise but the fact of the matter is that legitimacy is a complicated issue, and in reality governments actually have quite a bit of legitimacy; I don't think this is a very fruitful tack to take.

Face it, the government is just a set of institutions designed to solve various incentive and informational problems. As in all institutions, some things work well, some things work poorly, some things work as intended and there are also unintended consequences.

As far as the framing of government, I am not sure one necessarily has to limit oneself to one or the other of the two choices you present. However, I suggest that your choices are really a variant on the natural rights vs consequentialist distinction, i.e., government is either ethically bad or practically bad. Choosing ethically bad of course also implies practically bad, as far as I am concerned. In any case, I choose a) although i) I wouldn't characterize government as "criminal" but rather, at least in its modern extent, as unethical, primitive, vicious and predatory, and ii) clearly I prefer competitive government to non-competitive government. Competitive government will tend to be much less extensive government as well. Referring to government as "criminal" doesn't quite capture the extent to which the populace as a whole is complicit in both the predation and the voluntary servitude.

Limiting oneself to choice b) also commits the massive strategic error of maintaining (or at least not contesting) the fiction that government is at its base well-intentioned. In addition to encouraging submission to supposed well-meaning authority, it allows people to conveniently ignore their own complicity. Nothing of substance will change until people stop automatically trusting government and recognize the predatory nature of modern government and their own role in that predation. One may see some temporary gains on the basis of b) alone but the same forces that have made our governments much less competitive over time will still be present and, in the absence of a healthy mistrust of government motives, will from time to time gain the upper hand again, just as they did originally.

I see attempts at "happy-face" libertarianism as losing strategies, in large part because they concede the most important arguments to the opposition and mask the full horror of modern government. I have spent a professional lifetime in advocacy and you don't win by conceding the moral high ground to your adversaries.

Concerning the academic world, lots of good stuff has been produced by libertarian-tending economists, particularly the free banking crew but lots of others as well. In general, however, the academic world (even in economics) is not liberty's ally. It has been co-opted by the state through funding-related incentives and reinforced by self-selection. The academic world is not a market for truth but for prestige. In economics, prestige derives in large large part from influence over government and thus from state-friendly ideologies or "science". The academic world has become the gate-keepers, filterers and the ideological buttress of the state. Exhibit #1: the rather mysterious and almost total lack of curiosity for many decades by so-called free-market-oriented mainstream monetary economists in free banking. Exhibit #2: anything to do with anti-trust or market "failure".

Clearly, one needs the intellectual tools to combat the pro-state orthodoxy but the question is whether they are best generated by individuals working within academe or not.

It seems apparent that credit for the recent surge in interest in libertarianism is due to Ayn Rand's books (as always), individuals like Ron Paul, think-tanks (notably Mises but also Cato et al) and blogs such as econlog, econtalk, cafe hayek, etc., i.e., institutions or individuals that not only bypass the mainstream academy but are generally reviled/ignored/ridiculed by it. The good news is that universities may be entering a period of decline due to disintermediation and growing scepticism as to the value to most individuals of a university "education".

Stated baldly, the "government as criminal gang" notion seems wrong to most people, because criminal gangs do not behave quite like the governments we know. Criminal gangs rarely are so totalitarian, making exit from their predation so difficult. Criminal gangs rarely ask for input. Criminal gangs rarely offer as many benefits for non-members. So the analogy will be lost on most practical people.

And yet the origin of political governance, historically, has been in conquest by people who are basically criminals. Their adoption of ideas of justice and service transform their enterprises over time, and then the revolutionary democratization projects turn monopoly private provision to monopoly "socialism" of whatever services they provide.

Both perspectives should be incorporated into one evolutionary and economic view.

The relationship between conqueror and conquered is a strange one. Government and citizen relationships grew out of them. More work should be done explaining why they evolve as they do....

My usual rap explaining why the services provided by government are rarely as efficient as could be provided in a stricter rule-of-law free-market setting focuses on a variety of factors (knowledge problems, co-ordination problems), one of them being that the evolved constitutions and norms of state-citizen arrangements grow from roots that have service provision as an afterthought, and that the basic "deal" between conqueror and conquered encourages patterns of expropriation.

It comes down to logic and principle. Government is a form of criminal enterprise where a political elite uses force to extract tribute from its citizens. Many may not like Rothbard's characterization but I doubt that there is a logical argument against his position.

Now the question is should Libertarians lie and pander to power so that they could get more influence or should they stick to principle and be shut out of power. I suggest the latter because not defending one's principles ultimately leaves a libertarian in a much weaker position. This does not mean that libertarians should stand around waiting to become victims. Ironically, by taking advantage of what human nature tells us is most likely to happen libertarians can actually protect their own personal position and become much wealthier and freer than they could in a true libertarian society.

"Is a politics based on competitive government ("agorism"?) even the same thing as a politics based on small government ("libertarianism")?"

Yes and no -- the two aren't the same thing, but often result in similar conclusions.

The agorist will say that all government functions should be provided competitively and voluntarily, because it is morally wrong to coerce a free individual to participate against his will. It is a secondary benefit that most agorists believe competitive governance will also work better than monopoly governance.

The small-government libertarian will say that *most* government functions should be provided competitively and voluntarily, both because these functions exceed the limitations of a legitimate government's powers (i.e. protection of negative rights), but ALSO that competitive institutions tend to work better than monopoly institutions.

But you want it to be a monopoly in some ways. Imagine if multiple overlapping groups had the people to extort resources and violently coerce your behavior at the same time?

The ideal government has perfect monopoly in coercive behavior so that it undersupplies the coercion, but you are allowed (and its easy to) switch to a different government.

In short if you are under a government, you want it to be THE ONLY group that can coerce you. Ideally there would be no coercion, but if it is going to happen, you want it to be from only one group at a time.

Turns out that governments treat previous administrations as criminal enterprises. Here in Alabama, we just applied for a state-issued document, and included a birth certificate notarized by the previous Alabama Dept of State office holder. The document was rejected, because only documents notarized by the current office holder are recognized.

You more-or-less have to read the rejection letter with a mafia accent. It seems unbelievable that a new administration would reject a purely administrative document such as a notarized birth certificate for no other reason than it was signed by the old guy, not the new guy.

1.
(a) gets you nowhere with pretty much anybody, including some people who are generally sympathetic.
(b) permits you to have a discussion with most people, libertarian and not, but the end result won't be libertarian. At best, it will probably take us in a more libertarian direction, or at least a direction with more efficient government. As Tyler Cowen has mentioned, though, more efficient government is not necessarily an unalloyed good.

I personally am a strong believer in (b), but I think of myself as libertarian-leaning rather than libertarian.

The main lesson which the true liberal must learn from the success of the socialists is that it was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion which is daily making possible what only recently seemed utterly remote. Those who have concerned themselves exclusively with what seemed practicable in the existing state of opinion have constantly found that even this had rapidly become politically impossible as the result of changes in a public opinion which they have done nothing to guide.

The effect is that many well-meaning people no longer have the capacity to think, or at least formulate thought, outside of the rehearsal of the academic job talk. They present their marketability and this mode of presentation affects even those who are at first not academic. The nonacademic intellectual has “arrived,” so to speak, when the academic post is offered in recognition of the supposedly nonacademic intellectual achievement.

[Link edited. Quote is from "The Market Colonization of Intellectuals," by Lewis R. Gordon.--Econlib Ed.]

Political organizations exist. They aren't us. We have to deal with them. I think that the best way to deal with the political organizations that impact my life is exactly the same as the way that the political organizations deal with me - that is, I use them to maximum personal advantage.

The government is given (or more likely takes) a monopoly on legitimate coercion. From here the problem is the extension of government into other services and roles without competing alternatives.

I think (b) is close, but not spot on. I would rewrite it:

"as a service provider that inappropriately extends its monopoly of legitimate coercion into other areas of service."

This of course consents that there is an appropriate role for a monopoly on legitimate coercion -- something not all libertarians agree with either. That problem aside, I think the rewrite captures the issue of coercion better than the original (b) without the assumption of illegitimacy in (a).

I would be ecstatic to live in a land of very limited government focused on defending property rights with competing alternatives available for most other services. If I could choose such a system I would.

How should libertarians frame government?
(a) as a criminal enterprise; or
(b) as a service provider that does a bad job, largely because it is a monopoly, with too many restrictions on entry and exit

B, because this is the correct answer (well, for our "advanced" western democracies).

Patri Friedman and I argued for (b)... [but] On the other hand, back in the real world, I buy into the analysis of North, Weingast, and Wallis in Violence and Social Orders. That is, the "natural state" consists of limited-access orders, in which violent elites divide up wealth and power. According to NWW, the process of getting from these limited-access order to open-access orders is not easy...

No, the *true* "natural state" for most of humanity's history (and still in some parts of the world even today) is pre-governmetal society before these "criminal enterprise/monopolies" arise. And remember humanity's condition in this true natural state, regarding which I quoted Jared Diamond in a comment a week ago...

"It’s true, of course, that twentieth-century state societies, having developed potent technologies of mass killing, have broken all historical records for violent deaths.

"But this is because they enjoy the advantage of having by far the largest populations of potential victims in human history; the actual percentage of the population that died violently was on the average higher in traditional pre-state societies than it was even in Poland during the Second World War or Cambodia under Pol Pot."

The "monopolists" of government grab a monopoly over use of force -- pretty much the essential condition of government -- which is *hugely beneficial* for the population by greatly reducing this killing and creating larger social order. Of course as monopolists they grab monopoly profits for providing this service. Thus the "wealth of kings". But it is still hugely beneficial for the populace -- thus the great popular fear of disorder from the toppling of a king, and popular belief in the "divine right of kings".

High-quality king/mafia don/monopolists don't simply loot their territories, they promote higher degrees of order (law) and economic development (wealth) -- if only to secure their positions and increase their profits. This results in other local centers of wealth and power arising within the kingdom/territory of the don. In well-run/fortunate territories, these obtain the stature to start bidding away the monopoly profits. Now these fortunate societies are on the course to become N-W-W "open access" orders -- and move ever closer to the libertarian ideal, if ever so slowly and incrementally.

Suppose that we start from an open-access order (a modern Western democracy with a mixture of markets and government). If people were to discard their romantic attachment to the state, would that lead to a competitive market in government, or would it lead to a reversion to the natural state?

Bogus question. Suppose frogs had pockets, would they carry watches in them? There is no ideal condition where people are "out of the state" yet still can exercise choice between having our current government or some libertarian ideal.

The *only way* to get closer to the libertarian ideal is to do one's best to continue the natural course of development from the murderous "natural state", to monopoly power suppressing murder and furthering wealth and development in the interest of the monopolist, to development of the ability to bid away the monopoly power. To continue gradual movement towards more competitive government.

In practice, we can increase both welfare and freedom by pushing progress down this course. In principle, ultimately governmental monopoly power may be entirely bid away so the state finally withers away as we finally approach the libertarian ideal. Perhaps Marx would appreciate the irony!

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